Tai Ly v Abbe Corrugated Pty Ltd

[2015] FWC 6939

[2015] FWC 6939

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Tai Ly
v
ABBE Corrugated Pty Ltd
(U2015/6612)

COMMISSIONER GREGORY MELBOURNE, 15 DECEMBER 2015

Application for relief from unfair dismissal.

Introduction

[1] Mr Tai Ly has been employed on a full-time basis by ABBE Corrugated Pty Ltd (“ABBE”) as a machine operator since 2007. Prior to that time he was also engaged by the business on occasions as a casual employee. However, his employment was terminated on 10 July 2015 following two incidents, in particular, and further findings of misconduct. The first involved an allegation of misconduct in that on 25 June he had failed to gain prior approval before leaving the administration office. The second incident occurred on 30 June when he accidentally dropped a wrench into a machine he was operating. This subsequently caused significant damage to the machine after he restarted it.

[2] Mr Ly was terminated after an investigation was carried out into these incidents. He subsequently lodged an unfair dismissal application and now seeks to be reinstated to his former position.

[3] Mr Ly appeared on his own behalf. Mr R. Millar was granted leave to appear on behalf of ABBE under section 596(2)(a) of the Fair Work Act 2009 (Cth) (“the Act”).

The Issue to Be Determined

[4] Was Mr Ly unfairly dismissed on the basis that his dismissal was harsh, unjust or unreasonable, taking into account the matters in s.387 of the Act that the Commission must have regard to?

The Evidence and Submissions

[5] Mr Ly provided a written statement which indicated he was employed by ABBE to operate a machine that produces cardboard boxes. His statement continued to make reference to the letter of termination provided to him which describes the two incidents that led to his dismissal.

[6] He indicates that the first incident occurred on 25 June and concerned his failure to gain approval to leave his workstation to attend the admin office. He indicates in response a certificate of capacity relating to a workplace injury he had previously sustained was issued to his Supervisor on the previous day. He said his injury prevented him from working at his normal workstation and he had not yet been allocated alternate duties.

[7] He said he already had permission from his Supervisor to be away from his work area to attend a union meeting and then went to the administration office immediately following the conclusion of that meeting. He said he believed his behaviour had been condoned because he was allowed to continue working for a further eight days without any issues being raised. He also states there were no discussions with him about any disciplinary action in regard to this incident and he only became aware of the subsequent action when he received a termination letter in the mail on 14 July 2015.

[8] The second incident occurred on 30 June and was described by ABBE as Mr Ly failing to take appropriate action following the loss of an adjustment tool on the machine he was operating at the time. Mr Ly states in response it was not uncommon for the tool to be accidentally dropped into the machine and it would normally fall through the machine and become lost in the waste removal system. He said his decision to not locate the tool before starting the machine was based on the fact he could not see the tool within the machine and had assumed it had fallen through.

[9] He continued to state that he believed his behaviour was condoned because he was allowed to continue working on the machine during the next five days. He also states he was ensured by the Plant Manager on the day after the incident that he was not in trouble and he was aware of similar incidents. He also states there was no company policy in place which stated that the machine could not be started if the tool is dropped within the machine and not located.

[10] He said management was also aware the tool had been dropped in the machine without being located on previous occasions, and these had been documented in the production control system which is viewed by management on a daily basis. He also said that as a result of the investigation into the incident it was decided a chain would be attached to the tool to prevent a recurrence of the incident, and this indicated the design of the tool contributed to the accident. He also made reference to an email received from a Field Technician involved with the business that manufactures the machine indicating it is not uncommon for the tool to be dropped inside the machine and it would normally fall through without becoming lodged.

[11] Mr Ly’s statement also made reference to allegations of “other ongoing misconduct” 1 and indicated he presumed this related to two further incidents. He said on 12 March 2015 he was accused of failing to call his supervisor before commencing a flagged job and produced 7 – 10 defective boxes. He said he was subsequently issued with a verbal warning, but it was indicated in a disciplinary meeting that this incident was out of character for him, and he had an exceptional record for maintaining quality standards. He also stated that the warning he received in regard to this incident was later withdrawn.

[12] He said the second incident occurred on 11 June when he received a verbal warning for producing 9,900 defective cartons. He said at the time of this incident he was taking painkillers to assist with his return to work after a workplace injury, and these had impaired his judgement.

[13] His statement concluded with a paragraph headed “Fate Predetermined.” 2 He continued to state that on 7 July he attended a disciplinary meeting with the Plant Manager to consider the termination of his employment. He said the only topic discussed in this meeting was the incident on 30 June, and at the end of the meeting the Plant Manager informed him that he would like to take some further time to consider what was said, and would schedule another meeting for the following day. He said he was then asked if he would like to empty out his locker and, as such, it was obvious the Plant Manager had already made up his mind before considering the matter any further. He indicated that a Union organiser attended this meeting with him. He also said the meeting scheduled for the following day was cancelled just prior to it commencing and his employment was subsequently terminated during a meeting on 9 July. That decision was confirmed in a letter dated 10 July which Mr Ly received on 14 July 2015.

[14] ABBE also provided a written outline of submission. It also relies on witness evidence provided by the Afternoon Shift Factory Supervisor, Mr Salih Mehmet, the Managing Director, Mr Anthony O’Sullivan, and the Plant Manager, Mr Matthew Trezise.

[15] ABBE submits Mr Ly was employed since 2007 as a Machine Operator, but in recent times it has had on-going concerns regarding his conduct, attitude and performance. It submits he was counselled on 13 occasions between 11 September 2012 and 21 January the 2015 in regard to a range of matters, including repeated failures to perform his duties satisfactorily, repeated failures to comply with directions, using his phone during work time despite being directed not to, repeated lateness without reasonable excuse, his poor attitude toward management, and his performance generally.

[16] It continues to submit that on 3 June 2015 Mr Ly was directed to attend a meeting to discuss the concerns about his conduct, attitude and performance, including persistent punctuality issues. This direction was provided to him by way of a letter which made clear termination of his employment was a possible outcome of the disciplinary meeting. It submits the meeting took place on the following day and Mr Ly attended with his Union representative. In its submission he did not offer a satisfactory explanation in regard to the matters raised and was issued with a warning.

[17] Its submissions continue to indicate that at about the same time it received a customer complaint regarding boxes produced on Mr Ly’s machine. An incorrect ink setting had been used and, as a consequence, 9,900 boxes were incorrectly printed and had to be destroyed. A further investigation indicated Mr Ly had not properly checked the settings as indicated by the checklist and he was issued with a further warning in relation to this conduct.

[18] On 25 June ABBE submits Mr Ly was unable to be located at his workstation during his shift. His supervisor subsequently telephoned him to find out where he was and Mr Ly responded by indicating he was at his workstation. The supervisor disputed this statement and Mr Ly then said he was visiting the pay office. It submits he was subsequently provided with a further verbal warning in relation to this conduct.

[19] Its submissions then make reference to the incident on 30 June when the tool was dropped into the machine and then restarted. ABBE submits Mr Ly did not take reasonable steps to first locate the tool or notify his Supervisor it had fallen into the machine. It also submits Mr Ly only made it known that he had dropped the tool after the machine had been damaged and the tool had been recovered.

[20] It submits he was subsequently directed to attend a further disciplinary meeting on 7 July which he again attended with his Union representative. It submits he was asked why he had failed to notify his Supervisor he had dropped the tool, and why he had failed to undertake a search for it prior to restarting the machine. It submits Mr Ly said he had undertaken a search for the tool, however, CCTV footage of the incident indicated this had not occurred. He also provided no satisfactory explanation for his failure to notify his Supervisor he had dropped the tool into the machine.

[21] ABBE submits he was stood down on full pay while the matter was further investigated and was again told termination of his employment was a potential outcome from that investigation. It also submits he was invited to and did respond to the allegations. He was then directed to attend a further meeting on 9 July and again provided with a further opportunity to respond. After considering his response he was terminated and this was confirmed in a letter dated 10 July. The reason for his termination was stated as being his failure to take appropriate action following the loss of the tool on 30 June; his absence from his workstation without reasonable explanation on 25 June; and other on-going misconduct issues.

[22] The submissions provided by ABBE also dealt with each of the matters in s.387 that the Commission must have regard to in determining whether a dismissal is harsh, unjust or unreasonable.

Whether there was a valid reason for the termination

[23] ABBE submits Mr Ly was terminated on grounds of serious misconduct which was a culmination of a period of sustained misconduct, including his persistent failure to perform his duties and comply with directions given to him, as well as his repeated lateness, a failure to take responsibility for his actions, and his poor attitude generally. In its submission the incidents on 25 June and 30 June were the “last straw.” 3 It also makes reference to his lack of candour in terms of his responses to these incidents. In its submission it had a valid reason for termination.

Whether the employee was notified of that reason.

[24] ABBE submits the evidence makes clear Mr Ly was fully aware of the reasons for his termination as a result of the processes gone through.

Whether the employee was given an opportunity to respond.

[25] ABBE submits Mr Ly was given every opportunity to respond to the allegations raised and did provide responses in the meetings on 7 and 9 July. He also provided a further written response.

Whether the employer unreasonably refused to allow the employee to have a support person.

[26] ABBE’s submissions indicate Mr Ly was accompanied by a Union representative at the meetings on 7 and 9 July.

Whether the employee had been warned about the unsatisfactory performance before termination.

[27] ABBE submits Mr Ly was not dismissed on the basis of his unsatisfactory performance, however, he was provided with warnings on a number of occasions, as its submissions and evidence indicate.

Degree to which the size of the employer’s business and absence of dedicated human resource management specialists impacts on the termination procedures.

[28] ABBE simply submits in response to each of these considerations that, “There were no deficiencies in the termination procedures.” 4

Any other matters that the Fair Work Commission considers relevant.

[29] ABBE indicates in its submissions that Mr Ly appears to be contending his termination was harsh and disproportionate, particularly for someone with his length of service. It refers in response to various authorities and submits they support the view that being a long serving employee does not materially change the circumstances involved. It also submits his termination was not related to a one-off instance of misconduct, but rather due to circumstances that had persisted over a significant period of time when Mr Ly, given his experience, should have known better.

[30] Mr Salih Mehmet has been employed by ABBE since 2007, initially as the Day Shift Factory Supervisor, and from 2013 as the Afternoon Shift Factory Supervisor. His evidence indicated he was responsible for supervising Mr Ly on the afternoon shift in his role as a Machine Operator responsible for setting up and running jobs. His evidence dealt with a number of issues involving Mr Ly in the time he worked with him as his Supervisor. He said he “had real concerns regarding the Applicant’s performance, his behaviour and his attitude over the entire period I was his Supervisor.” 5

[31] He also stated that, “despite extensive counselling, the Applicant's performance, attitude and conduct failed to improve. I found him increasingly difficult to manage. He was often late for work and failed to provide any excuse or evidence to support his absences. Matthew and I had raised his lateness with him on several occasions and made it clear that it was unacceptable. Despite this, he continued to be regularly late for work.” 6

[32] His evidence continued to deal with a number of instances when Mr Ly had been spoken to about issues and matters of concern. However, he also indicated that despite this Mr Ly’s behaviour and conduct further deteriorated during the course of 2015, in circumstances where he was an experienced Machine Operator in a position of significant responsibility in the context of the overall business operation.

[33] His evidence also provided further detail about the incidents on 25 June and 30 June. Mr Mehmet indicated that in both cases he found Mr Ly’s lack of candour and honesty in regard to the responses provided about each of these issues to be totally unacceptable. His evidence concluded by indicating, “I struggled to effectively manage the Applicant over the course of his employment. I found him to be difficult and disrespectful and constantly challenged my authority particularly through his actions and failure to engage with me. No matter how many counselling sessions we had or how many warnings were issued, his attitude, conduct and performance did not improve. I found him to be dishonest and quick to blame others for his mistakes.” 7

[34] Mr Matthew Trezise has been employed by ABBE since 2009 and is now the Plant Manager with responsibility for the day-to-day management of around 120 employees. His evidence indicated that during his employment with ABBE Mr Ly has received several written warnings relating to his performance and conduct. He also indicated he has had “countless discussions” 8 with him regarding his performance and conduct and poor attitude to work, and he made reference to a number of incidents in the period from May 2014 to the time of his dismissal in this context.

[35] He stated:

“Despite my extensive counselling and efforts to assist the Applicant to improve, his performance and conduct failed to improve to the level required by Abbe Corrugated. From the commencement of this year, I started to notice a significant decline in the Applicant's performance and conduct which led to more formal counselling and a number of written warnings.

I have made considerable efforts to determine why the Applicant's performance and conduct had declined but he was not responsive to my enquiries. It did not matter how much I tried to discuss these issues with him, he failed to engage in any meaningful dialogue. I felt that I was hitting a ‘brick wall’ and his attitude to work and to improving his performance and conduct was very poor.” 9

[36] His evidence continued to provide further details about the incidents on 12 March involving the ink on the cartons being the incorrect colour, and the discussions about further performance and conduct issues in May, and then the further incidents that occurred on 25 and 30 June. His evidence also provided extensive detail about the discussions that took place with Mr Ly about these matters and his responses.

[37] His evidence concluded by indicating:

“The Applicant's poor performance, conduct and attitude had been a persistent feature of his employment. Despite extensive counselling, warnings, informal discussions, management and Union involvement, his performance and conduct failed to improve to an acceptable standard. In fact, it has steadily declined over the past 12 months. The Applicant has demonstrated a complete disregard for authority. He failed to follow the simplest of directions of management. His attitude and behaviour in meetings was completely unacceptable. I have real concerns regarding the Applicant's failure to take responsibility for his actions and to be truthful. His attempts to ‘cover up’ his mistakes are unacceptable and create the potential for further damage to machinery and may have safety implications.” 10

[38] The evidence of Mr Anthony O’Sullivan, who has been employed by ABBE since 1992 and is now its Managing Director, also dealt with many of the matters contained in the evidence of other witnesses. He concluded by indicating:

“Through the Applicant's work performance and conduct, he has shown himself to be unreliable and unable to meet the standards that Abbe Corrugated requires of its employees. The Applicant's routine tardiness, his failure to attend shifts on time or at all and his unsatisfactory explanations for his absences have, in my view, resulted in a complete breakdown of the trust and confidence that Abbe Corrugated requires of its employees. His attitude to management and supervisors is dismissive and his ability to comply with directives largely non-existent (particularly in relation to safety issues). He has shown a refusal to comply with clear directives and demonstrated that he is either unwilling or unable to report to work in a timely manner.” 11

Consideration

[39] Section 385 of the Act states that a person has been unfairly dismissed if the Fair Work Commission is satisfied the:

“(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.” 12

[40] In the present matter Mr Ly has been dismissed and claims his dismissal was harsh, unjust or unreasonable. Section 387 sets out the considerations the Commission must take into account in determining whether a dismissal was harsh, unjust or unreasonable. Those obligations are generally clear and well understood, and were simply stated by a Full Bench of Fair Work Australia in the matter of L. Sayer v Melsteel Pty Ltd 13 in the following terms:

“Where the applicant does present a case, in the ordinary course each of the criteria in s.387 which is capable of being relevant on the facts emerging at the hearing must be taken into account.” 14

[41] Section 381(2) also provides the manner of deciding a matter is intended to ensure “a fair go all around.” 15

[42] I now turn to consider the circumstances in the present matter in the light of the considerations in s.387 of the Act that I must have regard to.

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees);

[43] Previous authorities have, firstly, established that the existence or not of a “valid reason” is invariably an important issue in any unfair dismissal application and often determinative. In the often cited decision of Parmalat Food Products Pty Ltd v Kasian Wililo 16 a Full Bench of the Commission made the following statement about the importance of “valid reason.”

“The existence of a valid reason is a very important consideration in any unfair dismissal case. The absence of a valid reason will almost invariably render the termination unfair. The finding of a valid reason is a very important consideration in establishing the fairness of a termination.” 17

[44] The question of what is required to constitute “valid reason” was also considered in the matter of Selvachandran v Peteron Plastics Pty Ltd 18. It was decided under a previous statutory scheme, but is still relevant in the present context. At page 373 Northrop J held:

“In its context in s 170DE(1), the adjective ‘valid’ should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. the provisions must `be applied in a practical, commonsense way to ensure that' the employer and employee are each treated fairly...” 19

[45] It is also clear that the reason must be objectively valid. It is not sufficient that the employer believes it had a valid reason for termination. This was emphasised in the Full Bench decision handed down by this Tribunal’s predecessor in the matter of Rode v. Burwood Mitsubishi 20at paragraph 19 where the Full Bench held:

“....the reason for termination must be defensible or justifiable on an objective analysis of the relevant facts. It is not sufficient for an employer to simply show that he or she acted in the belief that the termination was for a valid reason.” 21

[46] I have already referred in some detail to the matters relied upon by ABBE to constitute a valid reason for termination in this matter and don’t restate them now. However, ABBE submits Mr Ly was terminated on grounds of serious misconduct as a result of a combination of sustained misconduct, including his persistent failure to perform his duties and comply with directions given to him. This situation, in its submission, was compounded by his lack of candour in response to these matters when raised with him.

[47] The issues to do with Mr Ly also came to a head as a consequence of three significant incidents that occurred during the course of 2015, which are again dealt with extensively in the evidence provided by Mr Mehmet, Mr O’Sullivan, and Mr Trezise.

[48] Mr Ly provided various explanations for the incidents that occurred during the course of 2015, and indicated in each case that his behaviour had either been condoned or subsequently accepted by his former employer. His evidence in this regard is in stark contrast to the evidence provided by the three witnesses who gave evidence on behalf of ABBE.

[49] Mr Ly has been employed by ABBE for a significant period of time and the evidence provided on behalf the Plant Manager, in particular, indicated he was considered to be an experienced Machine Operator, who was operating a machine whose output was important in the overall scope of the operations of the business. However, for reasons that are not entirely clear the evidence quite clearly indicates Mr Ly’s behaviour and performance significantly deteriorated over the last 18 months of his employment. The evidence provided on behalf of ABBE provides numerous examples of deficiencies in his performance and behaviour leading to him having to be counselled and warned in regard to these matters. This situation culminated in three significant incidents involving Mr Ly during the course of 2015. One resulted in significant damage to the machine he was operating. Another potentially jeopardised the relationship with a significant client, and the third cast doubts on his honesty. In all the circumstances of this matter I am satisfied ABBE had a valid reason to terminate Mr Ly’s employment.

(b) whether the person was notified of that reason;

[50] The evidence clearly indicates Mr Ly was notified of the reason for his termination. This was done verbally during the course of two meetings and subsequently confirmed in writing. This is evidenced by the witnesses for ABBE and by the submissions and evidence provided by Mr Ly.

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person;

[51] Again, the evidence provided by each witness in the proceedings confirms Mr Ly was provided with various opportunities to respond to the reasons related to his capacity or conduct.

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal;

[52] Mr Ly had a Union representative present in at least two meetings with his former employer. There were no submissions or evidence provided indicating he was ever denied any opportunity to have a support person present.

(e) if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal;

[53] Mr Ly took issue with some of the evidence provided by ABBE about warnings and counselling provided to him, suggesting these were more in the nature of general discussions rather than anything more. He also suggested that warnings given were later withdrawn. However, I am satisfied, on balance, based on the evidence before the Commission in this matter that Mr Ly was provided with a number of warnings, both verbal and written, in response to his behaviour and performance.

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and (g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal;

[54] ABBE submits that there were no deficiencies in the procedures followed in effecting Mr Ly’s dismissal and did not seek to rely on any matters related to the size of the business or its HR capacity by way of explanation for the procedures and approach adopted.

(h) any other matters that FWC considers relevant.

[55] The only other matter I consider relevant in this context is Mr Ly’s length of service. Prior to his dismissal he had been employed for eight years, which is a substantial period of time. It also appears he had some involvement as a casual employee prior to being engaged on a full-time basis. In circumstances where a person has an extended period of employment, and a generally good record in terms of their behaviour and performance, this might act in mitigation in appropriate circumstances. However, in the present matter the issues that provided the basis of the decision to terminate Mr Ly are by no means a “one off” set of circumstances, but instead involve a series of issues extending over a significant period of time. They also involve a situation where the performance and behaviour has not improved despite the counselling and warnings provided. In these circumstances I am not satisfied Mr Ly’s length of service provides any basis for mitigation of the decision to terminate his employment.

[56] I have had regard to all the submissions and evidence provided in this matter. I have also had regard to each of the matters contained in s.387 that I am required to take into account and am satisfied, in particular in this context, that there was a valid reason for dismissal. I am satisfied, in conclusion, that Mr Ly’s termination was not harsh, unjust or unreasonable. The application is therefore dismissed.

COMMISSIONER

Appearances:

The Applicant appeared on his own behalf.

Mr R Millar of Counsel appeared on behalf of the Respondent.

Hearing details:

2015.

Melbourne:

6 October.

 1   Exhibit TL1, Witness Statement at point 3

 2   Ibid at point 4

 3   Respondent’s Outline of Submissions at para 16

 4   Ibid at para 28

 5   Exhibit AB3 at para 6

 6   Ibid at para 17

 7   Ibid at para 36

 8   Exhibit AB1 at para 9

 9   Ibid at para 13-14

 10   Ibid at para 92

 11   Exhibit AB2 at para 49

 12   Fair Work Act 2009 (Cth) at s.385

 13   [2011] FWAFB 7498

 14   Ibid at para 20

 15   Ibid at s.381(2)

 16   Parmalat Food Products Pty Ltd v Wililo (2011) 207 IR 243

 17   Ibid at [24]

 18   Selvachandran v Peteron Plastics Pty Ltd (1996) 62 IR 371

 19   Ibid at page 373

 20   Rode v. Burwood Mitsubishi, Print R4471, 11 May 1999

 21   Ibid at para 19

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